SAFE STORAGE AT CEVA TYRE HOTEL
Inside CEVA Logistics’ Tyre City in Somaglia (Lodi), tyres can “enjoy” a true 5-star treatment in terms of safety and organization. CEVA’s Tyre Hotel solution provides the sector’s specialists with the opportunity to turn a complex yet essential service for the end user into a real business opportunity
The first autumn rains and snowfalls are the signal that it’s now time to get your car ready for the winter: a safety-conscious behavior indeed, but - let's face it – one that for many motorists can turn into a small ordeal, when having to decide what to do with the set of tires that will thus remain unused for several months. I mean, whoever doesn’t have a closed carport or, alternatively, the kind help of someone, among relatives and friends, willing to let them use their own, lands with the problem of not knowing where to put the unused set of tyres.
Hence, this ever increasing and widespread need created a new market demand and, along with it, a new opportunity for service, a seasonal tyre storage ( or Tyre Hotel as some call it), which can be easily accessed by simply contacting the nearest tyre dealer. If anything, it is far more difficult for the retailer to ensure that this, now indispensable, requirement in its relationship with the customer does not become a costly and time-consuming commitment.
In reality, if properly managed, a seasonal storage service can turn into an added value for the business, as a test bed to reveals one’s own professionalism and thus promote customer loyalty. Among the many supporters of this fact we find CEVA Logistics – a multinational logistics and distribution company -, which has developed within its very own Tyre City, a specialized service appropriately called Tyre Hotel.
A 5 star treatment at Tyre City.
CEVA’s Tyre City was inaugurated in Somaglia, near Lodi, about a year ago. With its 80,000 square meters of covered area divided into two sections, these facilities, entirely dedicated to the tire industry, can handle over 3 million items and over 130,000 deliveries a year, for a total of about 40,000 tons of cargo shipped throughout Italy. All with definite deadlines and lower costs, more economies of scale and sustainability, greater productivity and efficiency, hence able to guarantee greater customer satisfaction (whether multinational companies, wholesalers and distributors) not to mention the end user. You wouldn’t expect a seasonal tyre storage to be missing here, would you?
In CEVA’s huge hub, the Tyre Hotel is little more than a room. Of the one million tires currently stored within the Lodi based structure, only 40,000 are seasonal “guests”. But these “guests” are special indeed. Their management - from the time of collection at the retail point to when they are returned, including storage and handling - can in fact have a huge impact in the satisfaction of the end user and consequently CEVA’s customer too.
Stationary at CEVA’s Tyre Hotel for a good part of their stay, these tires are handled only twice a year, during the summer-winter seasonal replacement periods. The strong seasonal characteristics can make these activities quite complex. For a specialist such as CEVA Logistics, however, it is nothing more than "business as usual": “Tyre Hotel is a very important service and absolutely strategic for us and for our customers - explains Alberto Tosciri, CEVA Logistics Automotive & Industry Sales Leader - the seasonal deposit has, in fact, become an indispensable tool in the overall offer to the consumers and therefore crucial for their loyalty. But this also represents further business opportunities for the dealers, providing an organized and structured service".
From threat to opportunity
Several stakeholders in the world of tyres, particularly large distributors, have in fact immediately understood the potential benefits of these new market opportunities and created a service based on a solid, efficient and reliable logistical process. But this isn’t always the case, as Tosciri explains. If on the one hand, the response of the sector in addressing the growing demand for seasonal depots was immediate and widespread, on the other hand, several others players in the industry still cling to unsophisticated “self-made” systems developed as the emergency of offering customers a solution arises. "In order to obtain enough storage capacity to house a growing number of tyre sets, many dealers have resorted to changing the layout of their premises and gradually, as volumes kept growing, have used boxes or external structures to meet their growing needs - said CEVA’s Logistics Automotive & Industry Sales Leader - However, too often such solutions are not based on a solid organizational process; for example, the lack of an efficient information system creates a burdensome number of unnecessary movements. This unstructured approach - concludes Tosciri - makes it almost impossible to have the right perception of the real costs involved, which often remain submerged, thus limiting both efficiency and profitable opportunities".
When it comes to developing a seasonal tyre storage system, the bitter pill to swallow for most dealers is represented by the costs involved, along with the need for more storage space, dedicated resources during peak periods and, to top it all, increased administrative and operational complexities. In setting up a seasonal tyre storage and turning it into a profitable business, the alternative may be either having to make hefty investments or outsourcing all or part of the process. By choosing this second option and an already structured option, such as CEVA’s Tyre Hotel, a dealer can reduce the necessary investments and make the most of the them: "we already have the ‘assets’, which means we can guarantee our customers the large volumes needed to develop their business without having to face the costs of new facilities and more workers - explains Alberto Tosciri. Furthermore, we are also able to communicate with our customer’s IT system through our B2B portals. Our tyre tracking system can greatly help them manage their seasonal business flow and since we are aware of the business volume in the retail point, we can offer flexibility, for example delivery times". Thus the solution developed by CEVA, with its 5-star hotel for tyres, can turn a bitter pill into a tasty bite.
A carefully planned and well-structured process
From a practical standpoint, CEVA Tyre Hotel relieves the dealer, not only from a few extra costs, but also from the complications related to service management. It all starts once CEVA receives, through its B2B portal, a collection request from the retailer. Within 24/48 hours, the logistic network’s transport operator will collect the goods and proceed towards the identification of the set of tires through the application of a label generated by the system. As tyres enter CEVA’s management system, they are sent to Tyre City where, until the next tire replacement, they will be safely and comfortably stored at CEVA’s Tyre Hotel. Once again, through the company’s portal, after entering the vehicle's license plate number, the tire fitter will then, very simply, call up the set of tires to be returned to the customer. Whether it’s collecting from the point of sale or from the warehouse, the process will automatically kick off once the request is made through the portal, thus ensuring a certain service priority. All steps of the logistics process, from collection to delivery, can be tracked through the web, which allows complete visibility of the continuous activity carried out by CEVA Logistics. "The operational challenge is the concentration of the volumes. This venue of business, in fact, takes place in about 90 days a year, divided into two 45-day “seasons” - explains Tosciri. Honing the mechanism is the secret to offering a punctual and efficient service, preparing in advance the necessary facilities and paying particular attention to each collection place".
Several customers, mainly large distribution groups, have chosen to make use of CEVA’s Tyre Hotel - which is currently available only in Lombardy, but will soon expand to other Italian regions - "Planning- and organization-oriented companies have no problems in guessing the advantages of an organized logistics management - says CEVA logistics’ Sales Leader - Tyre Hotel, in particular, well represents Tyre City’s general “mission", which aims at becoming a meeting place for companies and other stakeholders who wish to approach the world of tires in an efficient and innovative manner, being part of a collaborative logistics philosophy, which is a founding and fundamental principle behind this project".
Tyre City in figures
- 80.000 covered square meters divided in two sections
- + 3.000.000 items a year
- + 130.000 shipments a year
- + 40.000 tons of goods delivered throughout the Country
- 22 warehouse-handling machines
What is CEVA
CEVA Logistics, a leading global logistics operator, is characterized by a non-asset based strategy (based on non-possession of assets), offering cutting edge solutions for large and medium-sized national and multinational companies. Approximately 41,000 employees in more than 160 countries are engaged in providing efficient solutions to supply networks in a variety of fields, where CEVA can leverage its operational expertise to deliver excellent services through an integrated network (www.cevalogistics.com).
The manufacturers’ opinion
In the field of seasonal tyre storage, a crucial game is being played. Tyre manufacturers seem so convinced about this, that many have developed methods and tools to support the dealers that are part of their specialized networks in managing this activity.
Pirelli’s Driver network, for example, provides its specialists with a comprehensive and structured support. The common management of the network enables retailers to develop and offer superior service, among other things. Retailers who cannot rely on enough storage space in their premises have the opportunity to use, at competitive prices, Pirelli’s storage service. "We support this kind of service, which we believe is really important, also by developing specific information and training," says Claudio Zanardo, CEO of Driver Italy.
"Information" and "training" are two of the keywords. Goodyear Dunlop has developed for its SuperService network a specific software, which allows to track and effectively manage all stored goods. "Every dealer chooses what to store on the basis of what the specific characteristics of its reference area are. Which is what we are trying to do, from an organizational and management point of view in order to help our dealer to transform costs into business opportunities, "says Marco Prosdocimi, SuperService Retail Manager.
On the other hand, also FirstStop, Bridgestone’s tyre network focuses strongly on information and training, with specific material and training programs to help its retailers to understand the benefits of the service and the proper way to approach it, not to mention how to inform the final consumer. "For the tire dealer this service represents an important opportunity to promote customer loyalty. What we are trying to do is help them to understand which details must be gathered upon collection and how to handle them, but also how to make the consumer aware of the value of what they are doing", explains David Ivac, First Stop Retail Manager, South Region.